US: Farmer $5.1M Restitution Accurate

LINCOLN, Neb. (DTN) -- A Nebraska farmer who pled guilty to one count of bank fraud waived his rights to appeal his sentencing, including about $5.1 million in restitution, and should have his appeal denied, federal prosecutors argue in a brief filed last week in federal appeals court.

Gering, Nebraska, farmer George Liakos was sentenced to 36 months in prison in late October 2023. He had faced a grand jury indictment going back to October 2021 on four counts of bank fraud and one count of making a false statement. Liakos was ordered to pay restitution to First Interstate Bank.

Following his sentencing, Liakos filed an appeal with the U.S. Court of Appeals for Eighth Circuit arguing the restitution amount set by the U.S. District Court for the District of Nebraska was inaccurate.

"Liakos waived his right to appellate review of his sentence in his plea agreement and it would not be a miscarriage of justice for this court to enforce that waiver," federal prosecutors said in a brief filed in the Eighth Circuit.

"The plea agreement included a provision that Liakos was waiving his right to appeal any sentence imposed. During Liakos's change of plea hearing, Liakos was extensively advised of his agreement to waive his appeal rights with limited exceptions. The magistrate judge repeatedly confirmed that Liakos understood his appeal rights, that he agreed to give up those appeal rights and had conferred with his attorney before agreeing to give up those rights and entering into the plea agreement."

Beginning in April 2017 and continuing through May 2019, Liakos misrepresented the number of commodities he had in storage, cattle inventory, and crop acres.

In addition, Liakos concealed his debt from Great Western Bank to secure approximately $11 million in loans, according to the U.S. attorney's office in Nebraska.

In a brief filed in the Eighth Circuit, Liakos alleged the district court judge erred in setting the restitution amount. He said the amount of loss and restitution should be recalculated to not "reward the bank for its misconduct in the disposition of the collateral. That amount should not be more than $1 million."

In the brief filed last week, prosecutors disagreed with Liakos' contention.

"The district court did not err in finding that Liakos owed $5,059,035.43 in restitution and that the United States had proved such restitution by a preponderance of the evidence and in also finding that Liakos had not credibly demonstrated that he was entitled to an offset," the U.S. said in its brief.

"Lastly, even if the court were to not enforce the appeal waiver, Liakos's below-guideline sentence was not substantively unreasonable."

Liakos argued the district court "erred and/or abused its discretion" by not considering what he said was a "deficiency" in the bank's failure to consider the fair market value of Liakos' collateral.

Doing so, the brief said, would be enough to "satisfy debt" to the bank.

Liakos contends the fair market value of the real estate and improvements of his property were more likely around $11 million.

Liakos owned about 2,000 acres of farm ground, according to court records, that he claims is worth at least $8.5 million.

Great Western Bank, which was acquired by First Interstate Bank, was a banking corporation with locations in Iowa, Colorado, South Dakota and Nebraska, including a banking office in Scottsbluff, Nebraska. Great Western Bank's deposits were insured by the Federal Deposit Insurance Corporation.

Liakos conducted a farming operation in Bayard, Nebraska, primarily growing beans, corn and sugar beets as well as raising cattle.

To obtain money from Great Western Bank, Liakos executed loans and a security agreement with the bank on June 2, 2017. The loans and security agreement consisted of a revolving line of credit, a machinery and equipment loan and a livestock loan.

In approving the loans and security agreement, Great Western Bank relied on information from Liakos reflecting current commodity and livestock inventory, accounts receivable, loans and accounts payable that he knew "materially overstated his commodity inventory and materially understated and failed to report loans and accounts payable," according to the U.S. attorney.

As a result of Liakos's scheme, Great Western Bank sustained a $3.9 million loss.

Read more on DTN:

"Nebraska Farmer: $5.1M Judgment Too High," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

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